Financial Statements - United Bank Limited

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NOTES TO AND FORMING PART OF THE UNCONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 The carrying amount of the deferred tax asset is reviewed at each statement of financial position date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be utilized. The Bank also recognizes a deferred tax asset / liability on the cash flow hedge reserve and on the deficit / surplus on revaluation of fixed assets and securities which is adjusted against the related deficit / surplus in accordance with the requirements of the IAS 12, Income Taxes. 5.9 Provisions Provisions are recognized when the Bank has a legal or constructive obligation as a result of past events which makes it probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Provision against identified non-funded losses is recognized when intimated and reasonable certainty exists for the Bank to settle the obligation. The provision is charged to the profit and loss account net of expected recovery and the provision is classified under other liabilities. Provisions are reviewed at each statement of financial position date and are adjusted to reflect the current best estimate. 5.10 Staff retirement and other benefits 5.10.1 Staff retirement benefit schemes The Bank operates the following staff retirement schemes for its employees a) For new employees and for those who opted for the new scheme introduced in 1991, the Bank operates - an approved contributory provident fund (defined contribution scheme); and - an approved gratuity scheme (defined benefit scheme). b) For employees who have not opted for the new scheme introduced in 1991, the Bank operates 5.10.2 Other benefits - an approved non-contributory provident fund in lieu of the contributory provident fund; and - an approved funded pension scheme, introduced in 1986 (defined benefit scheme). In 2001, the Bank modified the pension scheme and introduced a conversion option for employees covered under option (b) above to move to option (a). This conversion option ceased on December 31, 2003. The Bank also operates a contributory benevolent fund for all its eligible employees (defined benefit scheme). Annual contributions towards defined benefit schemes are made on the basis of actuarial advice using the Projected Unit Credit Method. For defined contribution schemes, the Bank pays contributions to the fund on a periodic basis. The Bank has no further payment obligation once the contributions have been paid. The contributions are recognized as an expense when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction of the future payments is available. a) Employees' compensated absences The Bank makes provisions for compensated vested and non-vested absences accumulated by its eligible employees on the basis of actuarial advice under the Projected Unit Credit Method. b) Post retirement medical benefits (defined benefit scheme) The Bank provides post retirement medical benefits to eligible retired employees. Provision is made annually to meet the cost of such medical benefits on the basis of actuarial advice under the Projected Unit Credit Method. 7
NOTES TO AND FORMING PART OF THE UNCONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 c) Employee motivation and retention scheme 5.10.3 Actuarial gains and losses 5.11 Subordinated loans 5.12 Borrowings / deposits a) Borrowings / deposits are recorded at the proceeds received. b) The cost of borrowings / deposits is recognized as an expense in the period in which this is incurred. 5.13 Revenue recognition 5.13.1 Advances and investments 5.13.2 Dividend income Dividend income is recognised when the right to receive the dividend is established. 5.13.3 Fee, brokerage and commission 5.13.4 Grants The Bank has a long term motivation and retention scheme for its employees. The liability of the Bank in respect of the scheme for each year, if any, is fixed, and is accounted for in the year to which the scheme relates. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are accounted for using a "corridor" which is the greater of 10% of the value of the plan assets or 10% of the defined benefit obligation at the end of the last reporting year. These limits are calculated and applied separately for each defined benefit plan. Actuarial gains and losses in excess of the "corridor" are credited or charged to the profit and loss account over the employees' expected average remaining working lives. Actuarial gains and losses pertaining to long term compensated absences are recognized in the profit and loss account immediately. Subordinated loans are initially recorded at the amount of proceeds received. Mark-up accrued on subordinated loans is recognised separately as part of other liabilities and is charged to the profit and loss account over the period on an accrual basis. Revenue is recognized to the extent that the economic benefits associated with a transaction will flow to the Bank and the revenue can be reliably measured. The following recognition criteria must be met before revenue is recognized: Mark-up / return / interest on performing advances and investments is recognized on a time proportionate basis over the term of the advances and investments. Where debt securities are purchased at a premium or discount, such premium / discount is amortized through the profit and loss account over the remaining period of maturity. Interest or mark-up recoverable on non-performing or classified advances and investments is recognized on a receipt basis. Interest / return / mark-up on rescheduled / restructured advances and investments is recognized when received or as required by overseas regulatory authorities of the countries where the branches operate, except where, in the opinion of the management, it would not be prudent to do so. Fee, brokerage, commission and other income is recognized on an accrual basis. Grants received are recorded as income when the related expenditure is incurred. 5.14 Foreign currencies 5.14.1 Functional and presentation currency Items included in these unconsolidated financial statements are measured using the currency of the primary economic environment in which the Bank operates. These unconsolidated financial statements are presented in Pakistani Rupees, which is the Bank's functional and presentation currency. 8
Page 1 and 2: United Bank Limited UNCONSOLIDATED
Page 3 and 4: U N I T E D B A N K L I M I T E D i
Page 5 and 6: U N I T E D B A N K L I M I T E D B
Page 7 and 8: U N I T E D B A N K L I M I T E D n
Page 9 and 10: U N I T E D B A N K L I M I T E D
Page 11 and 12: U N I T E D B A N K L I M I T E D A
Page 13 and 14: U N I T E D B A N K L I M I T E D d
Page 15 and 16: U N I T E D B A N K L I M I T E D T
Page 17 and 18: BOO EBRAHIM a: CO. CHARTERED ACCOUN
Page 19 and 20: U N I T E D B A N K L I M I T E D m
Page 21 and 22: BOO EBRAHIM ft CO. CHARTERED ACCOUN
Page 23 and 24: UNCONSOLIDATED STATEMENT OF FINANCI
Page 25 and 26: UNCONSOLIDATED STATEMENT OF COMPREH
Page 27 and 28: UNCONSOLIDATED STATEMENT OF CHANGES
Page 29 and 30: NOTES TO AND FORMING PART OF THE UN
Page 33: NOTES TO AND FORMING PART OF THE UN
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NOTES TO AND FORMING PART OF THE UN
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Annexure 'A' as referred to in note
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Sr. No. 1 Commercial Reprsentation
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Sr. No. Annexure 'B' as referred to
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Disposals of operating fixed assets
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Disposals of operating fixed assets
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Financial Statements - United Bank Limited

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